Written by Adam Jourdan and Marco Aquino.

BUENOS AIRES/LIMA/LOS ANGELES – China’s trade gap with the United States has widened in large swathes Latin America, since U.S. president Joe Biden took office in early 2013. This shows how Washington is being pushed to the sidelines in this region.

Exclusive Reuters analysis from U.N. Trade Data 2015-2021 shows China, outside Mexico, has taken over the United States as the largest trade partner in Latin America. The gap was even wider last year.

This trend is driven by South American countries that are resource-rich and demonstrates how the United States has lost ground within a long-held region. Biden, however, hopes to reestablish ties at the Summit of the Americas this week in Los Angeles.

Since the 1990s, Mexico and America have enjoyed a free trade agreement. The volume of commerce that exists between these two neighboring countries is greater than Washington’s with Latin America.

However, the U.S. trade gap in the rest the region with other countries has increased since Biden’s election in January 2018. This despite his promise to restore Washington’s position as a global leader, and to bring attention to Latin America after many years of what he used to call “neglect”.

Current and ex-officials on the ground told Reuters the United States was slow to act and that China offered more trade opportunities and investments to the region than the United States.

Juan Carlos Capunay was Peru’s ex-ambassador to China. He stated that Mexico is not important, but “the most significant commercial, economic, and technological ties are certainly with China which is the largest trade partner in the region well above the United States.”

However, he said that the United States was still more politically aligned in the region.

Mexico excluded, the total trade flows, imports and exports, between Latin America’s two largest economies reached almost $247 billion in the last 12 months, according to most current data. That is well over the $174 billion that China has with the United States. The data for 2021 does not contain trade statistics from all regions, but they balance one another in terms of U.S. China bias.

Mexico was the only country in Latin America that had trade flows exceeding $607 billion with the United States last year. This is up from $496 Billion in 2015. The country’s trade volume with China reached $110 billion in 2015, an increase of around $75 billion from six years ago.

A request for comment was not received by the White House or U.S. State Department immediately.

In an apparent effort to present a specific alternative to China, senior U.S. officials said Biden would announce an “Americas Partnership” plan at the Los Angeles summit focusing on promoting pandemic recovery by building on existing trade agreements.

According to officials, it would mobilize investment, revitalize the Inter-American Development Bank and create jobs in clean energy. It also aims to strengthen supply chain chains. But such an initiative could face U.S. protectionist pushback as well as questions about how the region’s widely diverse economies could make it work.

(Graphic: Latin America trade: US v China – https://graphics.reuters.com/LATAM-USA/CHINA/xmpjoxwkgvr/chart.png)

‘LOSING BATTLE’

Biden advisers, who traveled to Latin America with Biden, tried to persuade partners Washington was a better partner to do business.

However, a U.S. official spoke on condition of anonymity and admitted that Washington faces a difficult challenge.

The person stated that China will continue to offer cash to win the war.

The huge U.S.-Mexico Trade Flow is still the dominant factor, however, this ignores the larger trend in the region, where made-in China products are growing and Beijing is buying soybeans and corn.

China has a lead in Argentina and Peru. Brazil is seeing a significant advance despite Jair Bolsonaro, far-right president, being skeptical about China’s business interests.

(Graphic: Latam trade race: China vs USA – https://graphics.reuters.com/LATAM-USA/CHINA/akvezrlajpr/chart.png)

Welber Barral from Brazil, a partner of BMJ Consultores associados said that China brought in investment in transportation and infrastructure, which allowed for trade agreements in metals and grains. Governments often believed the United States was only rhetoric.

“Latin American governments are complaining about the lack of money, but they ask where is it?” He stated.

Los Angeles, USA-hosted Summit will be a crucial platform against China. But Biden is already being criticized by non-shows such as the Mexican President Andres Manual Lopez Obrador for excluding countries like Cuba or Venezuela.

Eric Farnsworth (an ex-White House official, now at the Council of the Americas), said that the rise in commodities prices has boosted Latin America and China trade figures. However, Biden acknowledged that the U.S. had an active domestic policy agenda, as well the war in Ukraine, which kept his attention elsewhere.

“There’s bipartisan consensus that the U.S. has not been at the table,” said he. The Summit can be part of resolving that problem, but it must also produce concrete results.